Dow Dips but Finishes Week Higher

NEW YORK ( TheStreet) -- Stocks finished lower Friday following a weaker-than-expected December jobs report and an adverse court ruling related to foreclosure liabilities that sank bank stocks.

The Dow Jones Industrial Average shed 23 points, or 0.2%, to close at 11,674. Earlier in the session, the bellwether index dipped as low as 11,599. The S&P 500 finished lower by 2 points, or 0.2%, at 1,271, and Nasdaq Composite slumped 6 points, or 0.2%, to settle at 2,703.

Still, the Dow managed to advance for the sixth consecutive week, starting the year with an 0.8% gain. The S&P 500 rose 1.1%, while the Nasdaq surged 1.9%. For the Dow, the rise was its biggest weekly advance since the week ended Dec. 3. It was also a good sign for the rest of 2011 as the Dow has finished in positive territory 74% of the time when it posts a gain for the first five trading days of the year.

Breadth was negative among blue chips Friday with 12 of the Dow's 30 components moving higher. Boeing ( BA), Merck ( MRK) and Pfizer ( PFE) were the biggest percentage gainers within the Dow.

Financials were dragging markets lower, with JPMorgan Chase ( JPM), Bank of America ( BAC) and Travelers ( TRV) among the worst performers on the Dow.

LPL Financial's Jeff Kleintop said a turn lower for equities was likely overdue. "The market is so overbought, up over both its 50-day and 200-day moving average. That can be sustained as long as momentum is strong. Momentum has stalled in the last few weeks, which means a pullback could be in store," he said.

The weakness in the banks was driven by news that Massachusetts' highest court had upheld a ruling that foreclosures enacted by two banks US Bancorp ( USB) and Wells Fargo ( WFC) were invalid because the banks failed to prove that they held the mortgage at the time of the foreclosure.

Wall Street is worried the decision may have a cascading effect on other court rulings on disputed foreclosures. Shares of U.S. Bancorp were down 0.8% to $26.09, while the stock of Wells Fargo shed 2% at $31.50.

The December jobs report was the most closely watched news for traders however and the data was mixed. The Labor Department said the U.S. economy added 103,000 jobs in December , falling short of the 150,000 additions that economists had been expecting, according to The unemployment rate, however, fell to a better-than-expected rate of 9.4%, from 9.8%, previously, outpacing estimates for a December rate of 9.7%.

>>Unemployment Metric Lacking-Economists

"Overall the report fell short of expectations but when looked at from a two-to-three month perspective as opposed to a one-month report, it is generally positive," said Patrick O'Keefe of J.H. Cohn and a former deputy assistant secretary at Department of Labor. "The month to month was less robust but not severely so. It does confirm that the labor market is improving but at a sub-par rate."

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